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Inside Pure Storage’s channel program changes

The changes to Pure’s channel program and go-to-market motions are extremely significant, impacting most things except for Pure’s commitment to a 100 per cent channel strategy.

Michael Sotnick onstage at the Accelerate event

SAN FRANCISCO – At their Accelerate event here, Pure Storage has made a major revamp in their go-to-market strategy. The company has overhauled its channel program, making changes to simplify it which are accompanied by complementary simplification of product pricing. The new program is also designed to encourage partners to commit to Pure as their storage vendor of choice, rather than treating them as just one vendor among many.

“This is an important evolution to what Pure has done in our evolution with you,” said Michael Sotnick, Pure Storage’s vice president of partner, services and business development. “We have made some purposeful investments in this program, directionally, to where we want to take our relationship going forward. It’s really a big change – probably most significant in the company’s history.”

Sotnick described the changes as a fundamental rethinking of Pure’s partner strategy – with the significant exception that the commitment to a completely channel-focused go-to-market strategy remains unchanged.

“That’s the baseline,” Sotnick said. “One of our greatest strengths is our 100 per cent channel go-to-market. In a world where the competition has their partners competing with them, as well as with other partners, our 100 per cent channel model is resonating. We know that the program’s evolution has to be based on channel centricity.”

The program changes were also prompted by the announcement of the expansion of the FlashArray //X line, and more importantly, by Pure’s emphasis on a pricing change to put the NVMe-based FlashArray//X at price parity with the older FlashArray//M. The changes are intended to remove some customer objections to going with an early stage technology in NVMe, and make Pure’s commitment to NVMe as their flagship crystal clear going forward.

Andy Martin, Pure’s VP, Americas Channel, said that it’s not too simplistic to say that the program was redone to coincide with the pricing change.

“It really is that simple,” he stated. “These changes are all about simplifying things. We haven’t had standardized pricing and we have had different prices for different SKUs. Now we have implemented the ability to standardize off of list, and simplified pricing to the partner community around //X as well. We have also simplified the program. It almost amounts to a new go-to-market for Pure, in our looking to further empower the partner community.”

The new program remains the Pure Partner Program, although the former P3 tagline has been pointedly put out to pasture,

“P3 is retired,” Sotnick told partners. “It’s time for a new look. The focus is now on differentiation and profitability, wrapped up in a simpler way of going to market. The time is now to create a greater level of empowerment for each of you.”

This will be done through a two-tier partner program, which replaces the former three tier metallic one. The new top tier is the Elite – an invitation-only designation for Pure’s most committed partners. The Preferred Tier is everybody else who qualifies for the program.

Pure is stressing that the Elite tier – which they estimate will be about 20 per cent of partners – won’t be defined by success in selling a lot of boxes.

“There will be a minimum revenue bar to enter the Elite Tier, but it is very small,” Martin said. “Technical and other commitments will be key.”

The threshold to become Elite will be $500,000 a year in non-renewal transactions, with a minimum of five non-renewal transactions per year. Preferred partners will need to achieve $250,000 a year in non-renewal business to maintain status in the program. Partners who don’t achieve that will likely become former partners.

“We terminated 60 partners in North America in Q4,” Sotnick said. “We do not need partners of convenience in our portfolio.”

“These terminated partners were people who hadn’t been selling, or who just did one transaction,” Martin said. “We want partners who are committed to working with us. We don’t want partners who view us as just a line item on a card.”

So what are the criteria that will get a partner invited to the top tier?

“You will quickly see the dollar threshold is not what we are interested in,” Sotnick said. “The game here is not that the biggest partners are the top partners. Any partner, by demonstrating the level of investment commitment and capability, can achieve the top level in our program.”

“We didn’t want to make the program like everyone else’s, where the partners who do the most revenue get in the top tier,” Martin said. “The program is about investing in partners that invest in us. While the baseline revenue revenue of $500,000 is required, what gets you into Elite are things like having a deep Pure practice, with an appropriate level of certifications. It’s the ability to do non-disruptive migrations. It’s the ability to do installs running from the //M 10 to the //X 90 themselves, as opposed to having us do it.”

Martin said that there’s no real obstacle to partners doing more of the installations.

“We are typically up and running in an hour,” he said. “It’s not about the complexity of the physical setup. Our whole model has been about simplicity, and customers don’t want to pay a lot of money for rack and stack, but we do want partners to have services.”

“In post-sales, the ability to out together a thoughtful migration to future-proof things for the customer will also be important,” Sotnick said.

The specific criteria will be defined on August 1.

“We are 90 per cent there now,” Martin said. “We are fine-tuning things, however. After August 1, partners will build up their businesses over the next 10 months, and then in June it’s formalized. So they have 10 months to build their practices up to the level necessary to become Elite.”

The discount levels for the new program have already been set. Elite Partners will get a 55 per cent discount level for a registered deal, and a 45 per cent discount for a non-registered deal. Preferred partners will get a 53 per cent discount for registered deals and 43 per cent for non-registered.

“Deal registration is the foundation of the program,” Martin said. “It’s to protect partners from a pricing integrity standpoint. We don’t set street pricing, but those prices are at a better point than a Pure AE in the field will have. It gives partners the ability to work a deal independently of the Pure AE.” That should give partners the ability to cut deals without having to slow down the process by asking for special pricing in many cases.

“Can a predatory Elite partner come in and wreck a deal for a Preferred Partner with deal registration?” Sotnick asked rhetorically. “At an 8 per cent differential, I hope not. But if we see behavior in the marketplace, we will take steps to eradicate that.”

The new program will retain and intensify Pure’s value channel approach, focusing on a relatively limited number of partners.

“The goal of these changes is to make it easier for partners to sell Pure solutions without Pure being involved, and that’s an evolution,” Martin said. “We have also simplified the program structure to empower partners to work more closely with Pure.”